HARD-UP families are being condemned to a life of debt after taking out loans they can never hope to repay.
Two thirds of people who took out a payday loan said no basic checks on their finances were carried out.
This led to nearly 50 per cent being unable to pay back the cash.
The Citizens Advice study laid bare how payday loan companies are locking thousands of Brits into a vicious spiral of debt — with many claiming to have been “hounded” after borrowing the money.
The survey discovered six in seven firms did not offer to freeze interest and charges after the borrower agreed repayments.
Seven out of ten didn’t explain how much it would cost to extend the loan.
And 84 per cent did not treat the customer sympathetically, according to feedback from 1,270 people who took out loans from 87 different firms.
One customer who paid £57 a month on a £500 loan stil owed £437 after six months. Others who struck a repayment plan found their bank account still raided on a daily basis by the lender.
And one man told how, a year after taking out a payday loan, he is still dependent on them as paying back the cash ate into his wages so much he needed another loan.
Citizens Advice chief Gillian Guy said: “The knock-on effect of their irresponsible lending is devastating for families.
“Many find they have no money to put food on the table, pay bills or get to work as lenders drain their bank account.”
Citizens Advice has seen a ten-fold increase in people seeking help about payday loans in the past four years.
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